St. Tammany Parish President Kevin Davis presented a lean budget to the Parish Council Thursday night, warning that difficult economic times would continue to cause revenue problems for the area.

Scott Threlkeld/The Times-Picayune archive'The issues we faced last year will continue to plague us in 2010,' said St. Tammany Parish President Kevin Davis in a letter to council members.

However, parish officials said funding from state and federal sources have allowed for expanded projects and programs.

The $98 million budget, which includes both the parish’s operating expenses and capital improvements, reflects a $1 million decrease from the amount originally budgeted for last year. Davis said that even though experts predict the country has “turned a corner on the recession,” the effects of the downturn will be felt for some time.

The parish will spend about $80 million on its operating budget next year and about $18 million on capital improvements.

The parish continues to see a decline in revenue from building permits and sales taxes, Davis said. Though about 2,900 permits for new residential construction were issued in 2004, officials believe there will be about 600 approved in 2009, he said.

In addition the parish, which had to reduce its budget this year because of a $5 million drop in sales tax revenue, is not expecting this financing source to increase next year, he said. "In essence, the issues we faced last year will continue to plague us in 2010," Davis said in a letter to the Parish Council outlining the budget. Thursday’s council meeting was the first introduction of the proposed budget. The final budget will be adopted Nov. 5.

The budget represents a slight increase over the adjusted budget adopted by the parish earlier this year, but a decrease from the original $99 million proposed last year. That budget was 6.5 percent lower than 2008’s budget.

“Everything that could be cut back has been cut back,” parish spokeswoman Suzannne Parsons-Stymiest said. “The only new things we’re doing are things we have received grants or other funding to do.”

As one cost-saving measure, the parish will not give merit raises to employees next year, continuing a practice that went into place last year, Davis said Thursday night.

The only new employee the parish is budgeting for is a legal position for the Parish Council, to ensure that someone can be trained when the council’s current attorney, Neil Hall, retires, Parsons-Stymiest said.

“We’re got to get you someone and it will take them a while for them to get up to speed,” Davis told the council.

Davis did note that the parish has benefited from funding from several federal and state programs, including $50 million of stimulus money that will go toward road construction and $26 million for drainage projects.

“It is interesting however, that we will need to streamline our programs and services funded by parish-generated revenue while we simultaneously expand programs and services that are funded primarily by the federal government,” Davis wrote.

Other federal funds are assisting or expanding social service programs, such as a project to set up health clinics for residents who do not have insurance. These clinics, which will operate on a sliding scale, will be run under the umbrella of a program already in place in St. Charles Parish.

In the next year the parish will focus on overhauling and streamlining its permitting and building process, evaluating its transportation and infrastructure needs and building the community in “as fiscally responsible a manner as possible,” Davis wrote.

“While our 2010 budget may not have the funds to accomplish all of the things we feel compelled to do, it will by no means prevent us from implementing and finding outside funding to continue building excellence in St. Tammany,” he wrote.